The crypto space had been highly anticipating the launch of Bakkt physical Bitcoin (BTC) futures after the plans were first announced in August 2018. Originally, Bakkt wanted to launch the physical Bitcoin futures in November, but this was delayed to Dec. 12 and then Jan. 24.
The January 24 launch date ended up being a failure as well, at least in part due to the government shutdown since the Commodity Futures Trading Commission (CFTC) cannot do anything for Bakkt until the shutdown ends. Now, there is no scheduled launch date for Bakkt.
Once the CFTC does reopen, Bakkt will have to go through a 30-day comment period to receive an exemption that will allow it to custodian its own Bitcoin (BTC). So once the government shutdown ends, it will take more than a month before Bakkt would be allowed to launch physical Bitcoin futures.
It is unknown when the government shutdown will end, so it’s possible the earliest Bakkt will launch will be March, assuming regulators are willing to approve Bakkt’s physical Bitcoin futures. Due to the two missed launch dates caused by lack of CFTC approval, the eventual launch of Bakkt physical Bitcoin futures is not 100 percent certain.
There are already Bitcoin (BTC) futures on the Chicago Board Options Exchange (CBoE) and Chicago Mercantile Exchange (CME), but these are cash-settled futures. This means that Bitcoin contracts on CME and CBoE are tantamount to printing paper Bitcoins, which is bad for the Bitcoin (BTC) market since it diverts demand away from the spot markets. Also, Bitcoin futures on CME have led to massive short selling pressure in the Bitcoin (BTC) market, and may be largely responsible for the ongoing bear market.
The Bitcoin futures on Bakkt will be settled every day for physical Bitcoins (BTC), and will directly increase demand in the spot markets. This makes the Bakkt physical Bitcoin futures a much better proposition for Bitcoin’s price than the CME Bitcoin futures. The crypto space was especially excited about Bakkt since the physical Bitcoin futures would be a fairly direct way of buying Bitcoin (BTC), and this option will be available on major stock trading platforms, opening another pathway for institutional investment into Bitcoin (BTC).
However, the CME and CBoE Bitcoin futures will certainly continue to exist after Bakkt launches. CME is operated by Globex, which is known to have a stranglehold over the gold market, a much bigger market than Bitcoin (BTC). This suggests that Bakkt physical Bitcoin futures will not have as much influence over Bitcoin’s (BTC) price because the CME Bitcoin futures — and the regime of short selling from CME Bitcoin futures traders — will likely remain dominant.
Despite the launch delays for Bakkt physical Bitcoin futures, they have raised $182.5 million and acquired Rosenthal Collins Group for an undisclosed sum of money. Bakkt says this will help its risk management and KYC/AML.
Regarding the acquisition, Bakkt says “This acquisition underlines the fact we’re not standing still as we await regulatory approval by the CFTC for the launch of regulated trading in our crypto markets.”
The wording of this statement may suggest that CFTC approval could take some time or approval may be in doubt in general. Bakkt would be the first Bitcoin futures market where real Bitcoins (BTC) would be involved in the process. Only time will tell if the CFTC is ready to approve that.